Mortgage application: What’s in it and how to complete it

Young Couple Viewing Property for Sale, Talking with Professional Real Estate Agent Outside the House.Image: Young Couple Viewing Property for Sale, Talking with Professional Real Estate Agent Outside the House.

In a Nutshell

A mortgage application includes information about your income, assets, liabilities, current properties, and the property you want to buy. Lenders use this information to decide if you qualify for a home loan and, if so, what your interest rate will be.
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Mortgage applications give lenders the information they need to decide if an applicant is eligible for a home loan

The application includes financial information lenders use to evaluate your ability to repay a loan on time. It gives the lender permission to pull your credit reports so they can see how you’ve managed credit in the past.

If your application is approved, the information you provide also helps lenders determine the interest rate you qualify for.

Let’s take a closer look at what type of information the application includes, which documents you need to provide and what you can expect after submitting your application.

What is the 1003 loan application?

Also known as the Uniform Residential Loan Application, or URLA, Form 1003 is a common mortgage application that lenders use to approve or deny someone for a home loan. Freddie Mac calls it Form 65.

It’s the most common mortgage application lenders use. But you may receive a different application depending on the type of loan you apply for. For example, lenders use Fannie Mae form 1009 for reverse mortgages.

Mortgage application requirements

There are eight sections in the Uniform Residential Loan Application that you must complete before the lender can process it. Here’s an overview of each section.

Section 1: Borrower information

This section includes basic personal information about the borrower, such as name, date of birth, Social Security number and address. You also need to provide your employment history and information about all the sources of income you receive. This may include income from an employer, child support, alimony, disability benefits and more.

Section 2: Financial information — assets and liabilities

Section 2 asks you to list your assets and liabilities. Your assets may include money in bank and retirement accounts, proceeds you received from the sale of property, rental income and more. Liabilities include amounts you owe on anything other than real estate, such as credit cards, personal loans, auto loans, alimony, child support and other debts you’re currently repaying.

Section 3: Financial information — real estate

In this part of the application, you need to list all the properties you own, the amount you owe on each, your monthly mortgage payments and the type of loan you have on each property. You must also indicate whether each property is a primary residence, second home or investment property, and whether you receive rental income from it.

Section 4: Loan and property information

This section includes information about the property you want to purchase, the loan amount you’re requesting, and gifts or grants you’ve received to purchase the property. It also asks whether you plan to use the property as a primary residence, second home or investment property, and if you expect to receive rental income from it.

Section 5: Declarations

In this part of the application, you’ll answer questions about the property you’re buying, prior real estate purchases, past foreclosures and your finances.

Section 6: Acknowledgements and agreements

This section outlines your legal obligations if you apply. You affirm that all the information you provided was accurate and that the lender has certain rights. This also indicates that you give the lender permission to pull your credit report and tax information.

By signing this section, you acknowledge that the lender may report your payment information to the credit bureaus — if your application is approved and the loan is finalized.

Section 7: Military service

If you or your spouse are currently serving, or previously served in the military, you’ll indicate it here.

Section 8: Demographic information

This section includes information about your race, ethnicity and sex. Federal law requires lenders to ask about this information, but you aren’t required to provide it. It is illegal for lenders to discriminate based on these factors.

Other documents you need for a mortgage

When you apply for a mortgage, the lender must verify the information you provide in the application. To do this, the lender will ask you to provide various documents with your application — such as a copy of your photo ID, bank and investment account statements, gift letters and more.

What happens after you submit your application?

Your lender must provide a loan estimate within three business days of receiving your application. The loan estimate shows the estimated closing costs and what interest rate and monthly mortgage payment the lender thinks it can offer if you decide to move forward with the loan. It’s not a loan approval.

If you proceed with the loan, the lender will conditionally approve or deny your application. If you receive conditional approval, a few things typically need to happen before you go to closing.

  1. The lender will order an appraisal. An appraiser will review the sale of recent homes in the area and visit the property you want to purchase to determine its fair market value.
  2. The lender will order a title search. This helps identify any liens or claims on the property.
  3. You must purchase homeowner’s insurance. You must show the lender proof of insurance before they’ll issue a final home loan approval.
  4. You will receive a closing disclosure. Once you meet the conditions of the loan and your application receives final approval, your lender must provide a closing disclosure at least three days before you close on your mortgage. This includes your loan terms, estimated monthly payment and closing costs. Review it carefully. If you have questions, ask your lender before you go to closing.
  5. Get your down payment and closing costs together. You will need to bring these funds to closing.

Your lender may ask for additional information while you’re waiting to close on your loan. They’ll help you navigate the loan closing process and answer questions you have along the way.

FAQs about mortgage applications

What are basic mortgage loan requirements?

When you apply for a mortgage, lenders want to know you can repay what you borrow on time. To qualify for a mortgage, you’ll typically need a steady source of income, a debt-to-income ratio below 43% and a down payment — though you may qualify for some types of loans with no down payment. You must also meet the lender’s minimum credit score requirements, which vary by loan type and financial institution.

What are the different mortgage types?

If you need a mortgage to finance the purchase of a home, there are several types to choose from, including conventional, jumbo, FHA, VA and USDA. FHA, VA and USDA loans are government-backed mortgages that may be easier to qualify for than other loans.

About the author: Jennifer Brozic is a freelance financial services writer with a bachelor’s degree in journalism from the University of Maryland and a master’s degree in communication management from Towson University. She’s committed… Read more.